The first full week of the 99th General Assembly initiated the tightest security at the Capitol building in history, thanks to a new emphasis by Governor Greitens. Missouri State Highway Patrol, Jefferson City Police, and State Capitol Police flooded the hallways and the perimeter of the building. Public entrances have been limited to the South and North sides of the capitol along with metal detectors being reinstated.

Red, white, and blue extravagant lighting adorned the Capitol for the inauguration and illuminated for miles. Country music singer, Sara Evans, entertained a large crowd during the inauguration in the rotunda of the beautifully decorated Capitol. Governor Greitens did not reveal the cost of the privately-funded festivities, but he did release a list of 87 benefactors that assisted in covering the expenses.

Governor Greitens Takes Office

Governor Eric Greitens, the state’s first Jewish governor, was sworn into office on Monday, January 9th on the south lawn of the Capitol. He took oath by placing his hand on a Bible once owned by a WWI veteran to become the state’s 56thgovernor. Governor Greitens pledged to take the state in a new direction and to end corruption and violence. He mentioned his plans to work with the supermajority of Republicans to push ethics reform, charter school expansion, and right-to-work.

Governor Greitens has been using Facebook and Twitter to inform Missourians of activity by his administration. His tendency to bypass traditional media in favor of social media is one parallel between Greitens and President-elect Donald Trump, who likewise relies on social media to reach his supporters.

Steelman to lead Office of Administration

Sarah Steelman has been appointed as the new Commissioner of the Office of Administration (OA). Steelman is a former State Senator and a former State Treasurer. She was a very early supporter of Governor Greitens after he announced his candidacy. She and her husband, David Steelman, also worked on the Greitens’ transition team. Steelman takes over the reins of OA from current Commissioner Doug Nelson who has accepted a position in State Auditor Nicole Galloway’s office.

Missouri Chief Operating Officer Announced

As promised, Governor Greitens announced his Chief Operating Officer to lead Missouri. Andrew Erdmann was selected to take the position. His duties include cutting waste, fraud, abuse and redundant services and programs. Mr. Erdmann resides in St. Louis and is a partner with McKinsey & Company. According to the firm’s website, Mr. Erdmann “specializes in helping public and private sector national security organizations to drive strategic, operational, and organization change.”

Republican Priorities on Fast Track

Governor Greitens’ and Republicans’ top priorities are already moving through the legislative process at lightning speed. Hearings were conducted this week on bills pertaining to right-to-work, transportation network companies, and ethics reform. Ethics reform and right-to-work were voted out of committee this week. Ethics reform banning lobbyist gifts was perfected on the floor of the House of Representatives today by a vote of 147-6. It is expected that Right to Work will be debated and passed on the House floor next week.

Executive Order on Gifts

On Governor Greitens’ first day in office, he signed an executive order that bans his staff from accepting gifts from lobbyists and or registering to work as a lobbyist. Many previous governors have not allowed staff to accept gifts, but no other governors have issued an executive order to inform their employees of the policy. However, the executive order is of no surprise as Greitens has publicly stated all throughout his campaign and inauguration that lobbyist’s gifts breed political corruption and should be stopped.

Executive Order on Excessive Regulations

On Governor Greitens’ second day in office, he signed an executive order to review regulations affecting each state agency he controls. State agencies were also ordered to suspend all rulemaking, with some exceptions, until February 28, 2017. His agencies were directed to review their regulations in order to remove unnecessary and burdensome regulations from state government. Each state agency must submit a report to the Governor by May 31, 2018.

State Budget

The House Budget Committee held their first meeting of the year, on Thursday, to learn the process, rules, and expectations of the Budget Committee. Chairman Rep. Fitzpatrick (R – Shell Knob) provided a summary to his committee members of the funding resources and obligations that the state faces. Currently, the state holds a $39 million negative cash balance with six months remaining in the current fiscal year. The negative cash balance combined with operating, supplemental, and capital improvements expenditures anticipated for the new fiscal year (FY18) leaves a negative estimated $456 million ending cash balance. Rep. Fitzpatrick believes the large negative balance will get smaller after the Governor announces his spending restrictions. It could also decrease or increase depending on the growth of revenue collections in the future. Rep. Fitzpatrick reminded his committee members to keep in mind that new spending will not be likely for FY18 due to the negative budget condition of the state.

Governor Greitens is expected to announce withholds any time now. Up to $150 million is predicted to be withheld in order to maintain a balanced budget. The state is facing a shortfall that has caused a negative math problem for the state coffers that can only be addressed by restricting funding in the current Fiscal Year 2017 budget.

The Fiscal Year 2018 Budget will get a late start this year due to Governor Greitens delaying his recommended budget after the State of the State Address. It is expected he will announce his budget priorities at the beginning of February. The House Budget Committee and the five House Appropriations Sub-Committees will continue working in the meantime to hear from the various state departments and their budget requests. The five House Appropriations Sub-Committees will determine their funding priorities for the full House Budget Committee to consider, which is expected to occur mid-February.

Legislative Directory

The Missouri State General Assembly legislative directories are currently being printed with updated rosters, contact information and committee lists. Once the directory becomes available, you will be mailed a copy.

Right To Work

HB 91, 42,131, 265, & 314 – sponsored by Rep. Rehder (R – Sikeston) specifies that a person cannot be required to become or refrain from becoming a member of or paying dues to a labor organization as a condition or continuation of employment. This is the “Right to Work” legislation that is a priority for the Republican legislature and Governor Greitens. This bill was heard in the House Economic Development Committee on Tuesday, January 10th. Testifying in support were the Missouri Chamber of Commerce, HTH Companies, Inc., the National Right to Work Committee, the Americans for Prosperity-Missouri, Missouri Rising, the Union Conservatives Inc., the Springfield Chamber of Commerce, the Missouri Century Foundation, Show Me Institute, Mackinac Center, and the Associated Industries of Missouri. Proponents argue it is necessary for Missouri to be able to compete with other states and attract jobs to Missouri. This bill is on the fast track and should move very quickly through the legislature. Testifying in opposition were the Missouri State Legislative Board Brotherhood of Locomotive Engineers, the Missouri Committee to Protect Pensions, the Heavy Constructors Association, United Auto Workers, the Builders Association of Kansas City, Missouri AFL-CIO, the Missouri National Education Association, the Missouri Association of Plumbing Heating Cooling Contractors, Plumbers & Pipefitters Local #562, the Carpenters’ District Council of Greater St. Louis, and IBEW 1/St. Louis NECA. Opponents argued the measure is government interfering between an employer and its employees as well as lowering employee wages. The committee adopted a House Committee Substitute and voted the bill out “do pass” by a vote of 8-4 on Wednesday, January 11th. The bill will now awaits a hearing in the House Rules-Legislative Oversight Committee.

SB 19 – sponsored by Sen. Brown (R – Rolla) states employers are barred from requiring employees to become or refrain from becoming a member of a labor organization or pay dues or other charges required of labor organization members as a condition of employment. This bill was heard in the Senate General Laws Committee on Wednesday, January 11th. This is the Senate’s measure on “Right-to-Work” that is a priority for the Republican legislature and Gov. Greitens. Testifying in support were the Missouri Chamber of Commerce, the National Right to Work Committee, the Americans for Prosperity-Missouri, Missouri Rising, the Missouri Century Foundation, Show Me Institute, Union Conservatives Inc., Mackinac Center, the Associated Industries of Missouri, the National Federation of Independent Businesses, the Missouri Farm Bureau, and United for Missouri. Proponents argue it is necessary for Missouri to be able to compete with other states and attract jobs to Missouri. Testifying in opposition were the Mechanical Contractors Association of Eastern Missouri and Kansas City, the Greater Kansas City Building Trades Council, the United Auto Workers of Missouri, Coalition of Black Trade Unionist, Missouri AFL-CIO, MKCCTPP & The Workers of Missouri, the American Federation of Teachers, the Heavy Constructors Association of Greater KC, Builders Association KC, the St. Louis Chapter National Electrical Contractor Association, UFCW Local 655, Empower Missouri, National Nurses United, Machinist Union, Plumber Pipefitters #562, Missouri AFL-CIO, United Steelworkers, SMART Local 36, Painters District Council 58 St. Louis, SEIU, the Carpenters Council of St. Louis and Kansas City, the Missouri National Education Association, and SMART Transportation Division. Opponents argued the measure is government interfering between an employer and its employees as well as lowering employee wages. No further action was taken at this time.

Other Bills of Interest

SB 21 – sponsored by Sen. Brown (R – Rolla) allows public employee labor unions to withhold fees from public employee paychecks only upon the annual written consent of the employee. The act also requires the public employee's annual consent for public employee labor unions to use fees and dues for political purposes. This is the “Paycheck Protection” measure that is a Senate priority. This bill was heard in the Senate General Laws Committee on Wednesday, January 11th. Testifying in support were the Americans for Prosperity, the Show Me Institute, the Missouri Chamber of Commerce, Mackinac Center, the Missouri Century Foundation, Missouri Farm Bureau, and Missouri Rising. Testifying in opposition were the Missouri State Teachers Association, the Missouri State Fraternal Order of Police, the Mechanical Contractors Association of Eastern Missouri and Kansas City, the Greater Kansas City Building Trades Council, United Auto Workers of Missouri, the Coalition of Black Trade Unionist, Missouri AFL-CIO, MKCCTPP & The Workers of Missouri, IBEW 1, the American Federation of Teachers, the Heavy Constructors Association of Greater KC, Builders Association KC, the St. Louis Chapter National Electrical Contractor Association, UFCW Local 655, Empower Missouri, National Nurses United, the Machinist Union, Plumber Pipefitters #562, Missouri AFL-CIO, United Steelworkers, SMART Local 36, the Painters District Council 58 St. Louis, SEIU, the Carpenters Council of St. Louis and Kansas City, the Missouri National Education Association, and SMART Transportation Division. No further action was taken at this time.

The following bills of interest to the HBA were referred to committee this week. We will notify you as soon as hearings for the bills are scheduled.

SB 16 – sponsored by Sen. Kraus (R – Lee’s Summit) exempts delivery charges from sales and use taxes. This bill was heard in the Senate Ways and Means Committee on Tuesday, January 10th. Testifying in support of the bill were the Associated Industries of Missouri, the National Federation of Independent Businesses, the Missouri Chamber of Commerce, the Missouri Concrete Association, the Missouri Retailers Association, the Missouri Rental Dealers Association, the Missouri Trucking Association, the Missouri Budget Project, the Missouri Restaurant Association, and the National Restaurant Association. Proponents argued the legislation was necessary to clarify a Department of Revenue and court ruling. There was no testimony in opposition to the bill. No further action was taken at this time.

Streamline Sales Tax (SST)

SB 105 – sponsored by Sen. Wallingford (R – Cape Girardeau) requires the Department of Revenue to enter into the Streamlined Sales and Use Tax Agreement. This bill was referred to the Senate Ways and Means Committee on Tuesday, January 10th. We will notify you as soon as a hearing for the bill is scheduled. We met with the Senate Ways and Means Committee Chairman, Sen. Kraus (R – Lee’s Summit) and discussed adding our “corrective” language to this bill while it is in committee. Sen. Kraus remembered our visit from lobby day last year and instructed his Chief of Staff to talk with the proponents of the SST bill to find out what they thought about including our language in the bill. Sen. Kraus also informed us that the proponents of the bill had asked him to hold the bill in committee and not have a hearing right now while they were trying to work out some other details regarding the legislation.

Other Bills of Interest

SB 16 – sponsored by Sen. Kraus (R – Lee’s Summit) exempts delivery charges from sales and use taxes. This bill was heard in the Senate Ways and Means Committee on Tuesday, January 10th. Testifying in support of the bill were the Associated Industries of Missouri, the National Federation of Independent Businesses, the Missouri Chamber of Commerce, the Missouri Concrete Association, the Missouri Retailers Association, the Missouri Rental Dealers Association, the Missouri Trucking Association, the Missouri Budget Project, the Missouri Restaurant Association, and the National Restaurant Association. Proponents argued the legislation was necessary to clarify a Department of Revenue and court ruling. There was no testimony in opposition to the bill. No further action was taken at this time.

SB 17 – sponsored by Sen. Kraus (R – Lee’s Summit) phases out corporate income tax over 3 years. This bill was heard in the Senate Ways and Means Committee on Tuesday, January 10th. Testifying in support of the bill was the Associated Industries of Missouri. Proponents argued the legislation was necessary in order to let companies know Missouri was open for business. Testifying in opposition were the Civic Council of Kansas City, the Missouri Budget Project, the Missouri Coalition for Community Behavioral Healthcare, and the National Education Association. Opponents argued to wait and see the full effects of SB 19 from 2015 which created a new method of allocating corporate income between states for tax purposes and we don’t know the impact that income tax cuts will have if triggered. No further action was taken at this time.

SB 31 – sponsored by Sen. Emery (R – Lamar) modifies provisions relating to collateral source rule and provides that parties may introduce evidence of the actual cost, rather than the value of the medical care rendered. This bill was heard in the Senate Government Reform Committee on Wednesday, January 11th. Testifying in support of the bill were the Associated Industries of Missouri, the Missouri Hospital Association, the Missouri Defense Lawyers Association, the Missouri Chamber of Commerce, Washington University, the Tort Reform Association, the National Federation of Independent Businesses, the Missouri Insurance Coalition, the National Mutual Insurance Companies, State Farm Insurance Coalition, the Missouri Railroad Association, the Missouri Petroleum Council, Doctors Company, Doe Run, Enterprise Rent A Car, Monsanto, the Missouri State Medical Association, and American Family Insurance. Proponents argued the need for transparency in medical cost to accurately reflect true out of pocked expenses. The measure is one of several pieces of legislation that address tort reform. Testifying in opposition was the Missouri Association of Trial Attorneys. Opponents argued the measure would violate the rights to a trial by jury and whether someone has insurance or not shouldn’t determine what they receive for their hardship. No further action was taken at this time.